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Jenaro Garcia， founder and CEO of Spanish telecommunications company GOWEX， has powered his company into a $500-million multinational giant， alongside a personal quest to leave the world a better place.
Now， Garcia is maneuvering GOWEX into China as part of his strategy to bring free or lowcost WiFi connectivity to 300 of the world’s major cities in less than five years.
Before he headed to China to attend the Summer Davos forum in Dalian and the Seventh Spain-China Forum Plenary Session Round Table in Beijing， Garcia sat down with Beijing Review’s contributing writer Corrie Dosh in New York City to talk about his innovative business model and his vision for a wireless world.
Beijing Review： The roundtable is called Spanish and Chinese Companies： Global Partners in a New Economic Model—what is this new economic model about？
Jenaro Garcia： Society has three main pillars： civil society， administration and companies. Until now， governments thought they needed to provide for their citizens like small children， and that people did not know how to provide for themselves. My belief is that new technologies are giving power to citizens and governments and businesses need to pay attention to that. Everybody is speaking about “smart cities.”But we at GOWEX are talking about “smart citizens.” When you have a city that has a public administration that is paying attention to the voice of the people and you have companies that are paying attention to the voice of the people， you have “smart citizens”—and “smart citizens” create what I call “wise cities.”
So， when we launched wireless technologies services our vision was that WiFi should be totally available for the people. WiFi is the water of the 21st century. I was born in a very old area of Madrid called El Rastro. El Rastro has the souq of Madrid， a popular market， and a very nice fountain—very old. When I was 7 years old it was an important part of that district because that area had no running water in the houses. Every day， I watched women carry cans of water from the fountain to take home for washing.
In the current situation in many cities， connection to the Internet is like that fountain. People have to go out of their home to find a connection. My vision is that we have to give the people a foundation for connectivity to facilitate development. In the same ways that cities provide water inside houses， you have to have access to the Internet cheap or almost free for the people to grow into an intellectual society. The 21st century is the society of the intellectuals， and， like you can’t survive without water， you can’t survive without access to the Internet. Having this access， this foundation to build on， what does that help people achieve for their societies？
Imagine if， in an undeveloped area， people had the opportunity to access a diagram of a water purification system. They have access to that and are able to build their own system and create activity in business and services. The Internet is free， so why are we creating barriers to access it？ Each month we give free service equivalent to more than 2.5 million euros （$3.3 million）—we value one user at 1 euro. That is great！ It is part of our philosophy. Our objective is to maintain the sustainability and to maintain the growth. Our plan is to reach 300 cities in less than five years and to reach 20 percent of the world’s population by 2020. We are focused mainly on emerging markets. Did you know that 50 percent of smartphone users in emerging markets have no connection to the Internet because they don’t have 3G available or because it is too expensive？ Providing these users connectivity that is quality， sustainable and free will allow them to develop as “smart citizens.”
Is that what the Summer Davos means by its theme for this year： Meeting the Innovation Imperative？ Is technological innovation the imperative for world economic growth？
I believe it is imperative but I think the approach the industry has taken is not correct. They all want to sell services to municipalities， but they have to think of smart citizens instead of smart cities. They are focused on business rather than the mass marketization of connectivity.
For example， some companies are doing a lot of work on applications for users to download—but how can you give an app to someone who has no connection？ Fifty percent of users in emerging markets have no connectivity. It’s like giving hard candy to a guy with no teeth. You are thinking of selling something without thinking of the people who would use it.
Are the markets that you are going into different？ Is going into Beijing or Shanghai different than going into Brazil？
Yes， we are learning and a big part of our business is the data we generate. Every time we come into a city we are learning from the culture of the citizens and the behavior of the people. We are able to help municipalities make decisions with that data. Of course， we are very keen to protect the privacy of people. We are compliant with the strictest protections of privacy. What we have observed is， for example， users in the Philippines are texting each other in the same room. When we were searching for each other earlier we called on the phone， but there they are using text messaging. Why？ Because， it is too expensive to call. Or， in Buenos Aires， people do not use their sophisticated smartphones in the street because of theft. In my industry we say that there is before the iPhone and after the iPhone. It’s like be- fore Jesus Christ and after Jesus Christ. And， we’re only at the tip of the iceberg. We have human-to-human Internet devices like the iPhone and Skype， and YouTube—and now， we have machine-to-machine Internet communications. It’s part of those “smart city”services that we are investing in. There will be more than 50 billion machines connected to the Internet by the year 2020. We are acting as the facilitator for that.
How important are partnerships when you are moving into emerging markets？ You have an agreement with China Railway Signal & Communication Shanghai Engineering Bureau Group Co. Ltd. （CRSCS） to provide WiFi on high-speed rail. What else are you developing？
For us， it is a requirement to have partners like CRSCS. We now have a new agreement with [Chinese telecommunications company] ZTE. They are the second largest such company in China after Huawei Technologies. On September 12 we announced an agreement with Guangdong Eastern Fibernet Co. Ltd.， a businessto-business carrier for companies and government institutions. The agreement promises to create one of the main wireless providers in Guangdong Province. The alliance with Eastern Fibernet will help us to increase the speed with which we reach agreements with Chinese local administrations， an important part of GOWEX’s worldwide leadership strategy， and will help us achieve our target of reaching 300 cities around the world.
Partnerships are essential for us in China. Not only because of the rules of doing business in China but also because of the knowledge of the culture and the behaviors of consumers. We are not putting Spanish people in our offices around the world； we are putting Spanish people and local people as much as possible. Usually our country managers are local people.
We are also moving into Ningbo [of Zhejiang Province]， the second largest port city in China with more than 10 million in- habitants. We’re signing a very important agreement to make Ningbo a “smart city.”
We have hired Margaret Chen as vice president for Asia， and， as you know， she is one of the most experienced and savvy experts in the Chinese telecommunications market. We made a good acquisition. We are trying to enlarge our staff with senior people from local markets. China is a very important market for us， we are forecasting that it will be around 30 percent of revenues overall and more than 50 percent of our revenue from emerging markets. Are there synergies between Spanish and Chinese companies and consumers？
There are many clear advantages for Chinese companies to do business with the Spanish people. We are the gateway to Latin America. And， we are a gateway for Chinese investors into Europe because our assets are undervalued. You can go into Spain and buy buildings and buy into industries at a fraction of the value of the business itself. I’m talking about real estate， industry， and many opportunities for Chinese investors to get into Europe that is cheaper than going into Germany， for example.
The economic opportunity for Spanish companies is clearly the size of the Chinese market. It is promising even though it may be overhyped—growth is cooling down and you have to be rational in making decisions. China has 1.3 billion inhabitants but you can sell only to a fraction of the population right now. However， the potential of growth is such that you have to invest now for tomorrow.
Then there is the opportunity for cultural exchange. The culture of Spain is very attractive to China. Spain has the opportunity to provide innovation and creativity to China. We are very advanced in creativity and novel thinking. There is a lot of opportunity for tourism. In gastronomy， wine and leisure—Spain leads the world.
Now， Garcia is maneuvering GOWEX into China as part of his strategy to bring free or lowcost WiFi connectivity to 300 of the world’s major cities in less than five years.
Before he headed to China to attend the Summer Davos forum in Dalian and the Seventh Spain-China Forum Plenary Session Round Table in Beijing， Garcia sat down with Beijing Review’s contributing writer Corrie Dosh in New York City to talk about his innovative business model and his vision for a wireless world.
Beijing Review： The roundtable is called Spanish and Chinese Companies： Global Partners in a New Economic Model—what is this new economic model about？
Jenaro Garcia： Society has three main pillars： civil society， administration and companies. Until now， governments thought they needed to provide for their citizens like small children， and that people did not know how to provide for themselves. My belief is that new technologies are giving power to citizens and governments and businesses need to pay attention to that. Everybody is speaking about “smart cities.”But we at GOWEX are talking about “smart citizens.” When you have a city that has a public administration that is paying attention to the voice of the people and you have companies that are paying attention to the voice of the people， you have “smart citizens”—and “smart citizens” create what I call “wise cities.”
So， when we launched wireless technologies services our vision was that WiFi should be totally available for the people. WiFi is the water of the 21st century. I was born in a very old area of Madrid called El Rastro. El Rastro has the souq of Madrid， a popular market， and a very nice fountain—very old. When I was 7 years old it was an important part of that district because that area had no running water in the houses. Every day， I watched women carry cans of water from the fountain to take home for washing.
In the current situation in many cities， connection to the Internet is like that fountain. People have to go out of their home to find a connection. My vision is that we have to give the people a foundation for connectivity to facilitate development. In the same ways that cities provide water inside houses， you have to have access to the Internet cheap or almost free for the people to grow into an intellectual society. The 21st century is the society of the intellectuals， and， like you can’t survive without water， you can’t survive without access to the Internet. Having this access， this foundation to build on， what does that help people achieve for their societies？
Imagine if， in an undeveloped area， people had the opportunity to access a diagram of a water purification system. They have access to that and are able to build their own system and create activity in business and services. The Internet is free， so why are we creating barriers to access it？ Each month we give free service equivalent to more than 2.5 million euros （$3.3 million）—we value one user at 1 euro. That is great！ It is part of our philosophy. Our objective is to maintain the sustainability and to maintain the growth. Our plan is to reach 300 cities in less than five years and to reach 20 percent of the world’s population by 2020. We are focused mainly on emerging markets. Did you know that 50 percent of smartphone users in emerging markets have no connection to the Internet because they don’t have 3G available or because it is too expensive？ Providing these users connectivity that is quality， sustainable and free will allow them to develop as “smart citizens.”
Is that what the Summer Davos means by its theme for this year： Meeting the Innovation Imperative？ Is technological innovation the imperative for world economic growth？
I believe it is imperative but I think the approach the industry has taken is not correct. They all want to sell services to municipalities， but they have to think of smart citizens instead of smart cities. They are focused on business rather than the mass marketization of connectivity.
For example， some companies are doing a lot of work on applications for users to download—but how can you give an app to someone who has no connection？ Fifty percent of users in emerging markets have no connectivity. It’s like giving hard candy to a guy with no teeth. You are thinking of selling something without thinking of the people who would use it.
Are the markets that you are going into different？ Is going into Beijing or Shanghai different than going into Brazil？
Yes， we are learning and a big part of our business is the data we generate. Every time we come into a city we are learning from the culture of the citizens and the behavior of the people. We are able to help municipalities make decisions with that data. Of course， we are very keen to protect the privacy of people. We are compliant with the strictest protections of privacy. What we have observed is， for example， users in the Philippines are texting each other in the same room. When we were searching for each other earlier we called on the phone， but there they are using text messaging. Why？ Because， it is too expensive to call. Or， in Buenos Aires， people do not use their sophisticated smartphones in the street because of theft. In my industry we say that there is before the iPhone and after the iPhone. It’s like be- fore Jesus Christ and after Jesus Christ. And， we’re only at the tip of the iceberg. We have human-to-human Internet devices like the iPhone and Skype， and YouTube—and now， we have machine-to-machine Internet communications. It’s part of those “smart city”services that we are investing in. There will be more than 50 billion machines connected to the Internet by the year 2020. We are acting as the facilitator for that.
How important are partnerships when you are moving into emerging markets？ You have an agreement with China Railway Signal & Communication Shanghai Engineering Bureau Group Co. Ltd. （CRSCS） to provide WiFi on high-speed rail. What else are you developing？
For us， it is a requirement to have partners like CRSCS. We now have a new agreement with [Chinese telecommunications company] ZTE. They are the second largest such company in China after Huawei Technologies. On September 12 we announced an agreement with Guangdong Eastern Fibernet Co. Ltd.， a businessto-business carrier for companies and government institutions. The agreement promises to create one of the main wireless providers in Guangdong Province. The alliance with Eastern Fibernet will help us to increase the speed with which we reach agreements with Chinese local administrations， an important part of GOWEX’s worldwide leadership strategy， and will help us achieve our target of reaching 300 cities around the world.
Partnerships are essential for us in China. Not only because of the rules of doing business in China but also because of the knowledge of the culture and the behaviors of consumers. We are not putting Spanish people in our offices around the world； we are putting Spanish people and local people as much as possible. Usually our country managers are local people.
We are also moving into Ningbo [of Zhejiang Province]， the second largest port city in China with more than 10 million in- habitants. We’re signing a very important agreement to make Ningbo a “smart city.”
We have hired Margaret Chen as vice president for Asia， and， as you know， she is one of the most experienced and savvy experts in the Chinese telecommunications market. We made a good acquisition. We are trying to enlarge our staff with senior people from local markets. China is a very important market for us， we are forecasting that it will be around 30 percent of revenues overall and more than 50 percent of our revenue from emerging markets. Are there synergies between Spanish and Chinese companies and consumers？
There are many clear advantages for Chinese companies to do business with the Spanish people. We are the gateway to Latin America. And， we are a gateway for Chinese investors into Europe because our assets are undervalued. You can go into Spain and buy buildings and buy into industries at a fraction of the value of the business itself. I’m talking about real estate， industry， and many opportunities for Chinese investors to get into Europe that is cheaper than going into Germany， for example.
The economic opportunity for Spanish companies is clearly the size of the Chinese market. It is promising even though it may be overhyped—growth is cooling down and you have to be rational in making decisions. China has 1.3 billion inhabitants but you can sell only to a fraction of the population right now. However， the potential of growth is such that you have to invest now for tomorrow.
Then there is the opportunity for cultural exchange. The culture of Spain is very attractive to China. Spain has the opportunity to provide innovation and creativity to China. We are very advanced in creativity and novel thinking. There is a lot of opportunity for tourism. In gastronomy， wine and leisure—Spain leads the world.